- Mastercard, which is one of the world’s premier financial services organisations, said that it was working with the Chinese central bank – the People’s Bank of China – to discuss the prospect of making its planned digital yuan interoperable across borders.
- The company, which has worked on similar projects in countries such as the Bahamas, is also believed to be discussing this prospect with other central banks around the world.
- “Central bank digital currencies such as that being piloted by Beijing could be circulated outside their home countries and converted into foreign currencies via a card clearing network,” said a senior spokesperson for Mastercard.
Leading financial services firm Mastercard has confirmed that it intends to play a role in helping the Chinese central bank set up a digital yuan for international money transfers.
The firm said it would explore helping the Chinese central bank set up the international exchange aspect of such a currency, which is known as a ‘central bank digital currency’.
It is believed that the company is in talks with the bank, known as the People’s Bank of China.
It is also understood that Mastercard is working with and discussing the matter with other leading global central banks.
The news came in an interview with the co-president of Mastercard’s Asia Pacific region, Ling Hai.
He said that a card clearing network would be an integral part of the conversion process.
“Central bank digital currencies such as that being piloted by Beijing could be circulated outside their home countries and converted into foreign currencies via a card clearing network acting as the conversion agent,” he was quoted as saying.
He added that Mastercard could add value in a very particular way – by giving countries the chance to ensure that their digital currencies could be spent around the world rather than just in their own countries.
“While central banks can address their domestic issues associated with digital sovereign currencies, the role we can always play is on interoperability, when the payment goes beyond a country’s borders,” he explained.
The interview took place with the South China Morning Post, a prominent newspaper based in Hong Kong.
He also raised the prospect of Mastercard issuing prepaid cards.
This was how the company approached the question of central bank digital currencies in the Bahamas.
There, a card ‘filled’ in advance allowed customers to store their central bank digital currency, which in the Bahamas is known as the ‘Sand Dollar’.
Conversion between traditional and digital currencies is considered to be one of the main ways to unlock wider trust in central bank digital currencies, Mastercard said.
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